IBA's Profit Turn Is Finally Real. The Cash Turn Is the Question.

Ion Beam Applications has spent decades as the world leader in proton therapy equipment — and most of that time as a company whose revenue grew faster than its profits ever did. The Half Year 2026 report, published this morning, is the cleanest signal yet that the profitability half is finally catching up. In the first six months, operating profit rose about 66% on sales up just 6% to €323.7 million, and the company swung to a net profit of €9.3 million from a net loss of €2.6 million a year earlier. Profit growing an order of magnitude faster than revenue is the signature of a margin story, not a volume story — and that is exactly what makes this report worth a hard look.

The old story: a leader that couldn't keep its margins

IBA sells and installs proton therapy systems — the particle accelerators, roughly the size of a house, that fire protons at tumors more precisely than conventional X-ray radiation. It also services the machines once they are installed, sells dosimetry equipment that radiotherapy departments use to verify their machines are calibrated, and builds smaller accelerators for radioisotope production and industrial sterilization.

The old script for this stock was simple and persistent: revenue climbs, but the money never quite sticks. Proton therapy equipment sells are lumpy, huge, and paid over years as projects are delivered and accepted. Gross margin hovered in the high-20s to low-30s, adjusted operating profit stayed thin — full-year 2025 produced €27.4 million of adjusted EBIT on €620 million of sales — and the company was still losing money at the bottom line as recently as the first half of 2025, a half in which revenue jumped 40%.

What changed in the first half

The H1 2026 numbers flip that script where it matters. Gross margin widened to 33.7% from 29.5% a year earlier. Adjusted EBIT — operating profit before interest, taxes, and one-off items — came in at €17.6 million, up from €10.6 million. And the division that used to be the profit problem, Proton Therapy, contributed €12.3 million of that adjusted profit. The engine that never made money is now the engine making most of it.

The market reads this pair of numbers a certain way. It is not a coincidence that the gross margin jumped: management put the improvement down to equipment mix and better execution, and there is a structural reason to believe it can last rather than snap back. Roughly half of the company's €1.6 billion order backlog — the total splits into €812 million of services and €750 million of equipment — now sits in the services column. Services are maintenance and support contracts on the machines already installed around the world — recurring, higher-margin revenue that compounds year after year as the installed base grows. The backlog itself is worth about 2.6 times 2025's total sales, which gives this business something most equipment makers cannot offer: visibility.

Orders back it up. Equipment order intake rose 64% to €176 million in the half, with clinical orders up 176% on the back of five proton therapy rooms sold. Management confirmed the full-year target of at least €32 million in adjusted EBIT — and here is the helpful arithmetic. The first half already delivered €17.6 million, so the second half needs only about €14.4 million to clear the full-year bar. The second half of 2025 earned roughly €16.8 million. The company is being paid to clear a lower bar than it already cleared a year ago, with a bigger backlog behind it.

The bridge that is still unproven: cash

Now the part that keeps me from getting ahead of myself. IBA does not report a clean free-cash-flow number; the disclosed anchor is its net debt. And that line moved the wrong way. Net debt stood at €81 million on June 30, up from €57 million at the end of March and from about €58 million at year-end 2025 (roughly €41 million excluding the ORA radiochemistry purchase). The reasons given are timing, not losses: milestone payments on big installations landing just after the period end, and invoicing delays tied to an ERP system migration. Management expects the net financial position to improve over 2027.

This is the classic equipment-maker test, and it deserves to be stated plainly. A company can report a beautiful income statement while cash sits trapped in half-finished hospitals in Spain and China. IBA is building out a ten-room project in Spain and has large China deliveries in the pipeline; the working capital gets consumed as projects install, and comes back as customers accept and pay. The H1 profitability is real. Whether it translates into cash on the balance sheet is the part of the story that is not yet proven — and because the free cash flow line isn't disclosed, the uncertainty here is higher than I would prefer. The honest framing is that the financial bridge is adjusted EBIT plus the cash trajectory, and the cash trajectory is still an open question.

The market has started to believe it

That matters because the price has already moved. Up roughly 30% year to date and trading near the top of a 52-week range of about €10 to €18, IBA is no longer priced as the forgotten turnaround. The shares sit just under half a billion euros in market value; add the €81 million of net debt and the enterprise is worth in the neighborhood of €555 million, or roughly 17 times the company's own target of €32 million in adjusted EBIT this year. Reasonable if the trajectory keeps improving, not obviously cheap — and a reminder that the easy part of the re-rating, the shift from "will it ever make money" to "it is making money now," has already been paid for in the stock.

So what decides the next twelve months is no longer the narrative. It is whether the numbers the market has begun to believe keep confirming. One half of strong order intake is a small sample in a lumpy business — clinical orders have swung sharply between reporting periods — and IBA Technologies' equipment order intake was a muted €28 million, with persistent overcapacity in industrial sterilization and dosimetry under cost pressure. The profit story is concentrated in Proton Therapy and services; the rest of the portfolio is mixed.

One practical note for a U.S. reader: IBA has no American listing. It trades on Euronext Brussels under the ticker IBAB, in euros — your broker needs international access, and the dollar-euro rate becomes a layer of the return, for better or worse.

What to watch, and what would break it

The proof path is specific enough to follow. The second half needs only about €14.4 million of adjusted EBIT to clear the full-year bar — less than the same half earned a year ago — so a stumble would be a signal, not noise. Clinical orders need to keep landing to refill what the backlog is being converted into. And the number I would watch most closely is year-end net debt: whether the working capital drain stops climbing and starts turning down as Spanish and Chinese milestone payments come in, pointing toward the 2027 improvement management has promised.

The thesis breaks in two ways that would be visible in the data: a cut to the adjusted EBIT guidance at the next reporting date, or net debt still climbing at year-end with no funded plan to reverse it. Until the cash line confirms the profit line, this is an improving story with an unproven bridge — worth watching hard, and worth keeping the enthusiasm in check while the cash catches up.